(Yicai Global) March 27 -- China's famous donkey-hide gelatin brand Dong-E-E-Jiao lost CNY444 million (USD63 million) last year in its first descent into the red in the 24 years since it listed. 

The company's operating income dropped almost 60 percent to about CNY2.96 billion (USD581 million) from the year before. Its poor fourth-quarter performance -- a CNY653 million loss -- was a major cause of this decline.

Dong-E-E-Jiao's shares [SHE:000423] rebounded today after falling to a 10-year low on March 23, rising more than 3.15 percent this morning to close at CNY27.52 (USD3.90) at noon.

To counter its slide In sales of the popular women's tonic, the company, which is based in Dong'e county, a remote rural area in eastern China's Shandong province, has put in place a new business model and will promote it this year to increase sales on its online platform. 

Incubating Nests

It will also cultivate and develop new product categories based on its traditional donkey hide gelatin foundation that center on ginseng and pilose antler, swallow's nests and North American ginseng.

Consumers made fewer trips to pharmacies during the Covid-19 pandemic, the 100-year old brand said, and this hit sales in its core segment, but the epidemic will stoke customers' long-term desire for products that nourish and protect health in demand which will only steadily grow, bringing opportunities to expand its product series and make its brands more famous.

Donkey-hide gelatin -- ejiao -- consists of a gluey substance derived from a decoction of donkey skin and dried tangerine or orange peels, sweet-scented osmanthus and other Chinese medicinal herbs, information on the website of the All-China Women's Federation shows. Ever more Chinese women use the compound formerly sent in tribute to the imperial household to improve their health. Ejiao dates back to the Qin (221-206 BCE) dynasty. Ancient Chinese deemed that from Dong'e county to be the finest.

Ejiao Elixir

Sweet-tasting ejiao invigorates blood circulation, moistens the lungs, reinforces body fluids and nourishes the blood, according to the federation. It cures dizziness, insomnia, coughing and palpitations. It helps women remedy irregular menstruation and prevents miscarriages. It further aids in cancer prevention and treatment and improves physical appearance, giving women who eat it rosy cheeks and glossy skin, while helping to strengthen their bones and muscles and enhance their sleep quality.

Pilose antler, traditionally called hartshorn in English folk remedies, is the hairy covering on stags' antlers as they begin to grow back with the advent of spring after being shed following the autumn rut. Its use is pervasive in traditional medicine everywhere deer species are present. 

Chinese consider ginseng from North America superior in quality and thus favor it over their own local produce. 

Swallows' nests soup is a Chinese delicacy eaten for over 1,000 years. Made from edible nests and dubbed the 'caviar of the East,' swallow's nest soup is among the most expensive foods in the world, costing in excess of USD10,000 per kilogram for choice specimens. The birds that glue their eggs to the side of cliffs with their phlegm -- the active ingredient -- are in fact swifts, not swallows. 

Editor: Ben Armour